Every honest financial forecast is a probability distribution. The Retirement Risk Simulator shows you how likely you are to leave your heirs lots of money. It shows you how likely you are to run out of money before you die. The simulator makes it easy for you to figure out at what age you can safely retire.

Future interest rates are uncertain. Future stock-market performance is uncertain. How long you're going to live is uncertain. Depending on your savings and withdrawals, depending on how well your investments perform and depending on how long you live, you might leave your heirs lots of money or you might run out of money before you die.

The Retirement Risk Simulator makes it easy for you to model the investment and longevity uncertainties you face. It shows you how your investments might perform under different economic scenarios. It shows you your financial future as a probability distribution.

Given the sophistication of the simulations, data entry is kept to a minimum. To use the simulator, all you have to do (if you accept the default forecasts) is type in your current age, target retirement age, projected savings and withdrawals and how you allocate your investments. Click some buttons and the simulator draws potential value paths of your investments.

Quickly run a few thousand simulations of how your investments might perform under different economic scenarios and the simulator calculates the probabilities that you'll leave your heirs different amounts of money and the probabilities that you'll run out of money at different ages. It draws your financial future as a probability distribution. (If you don't already, the simulator makes it easy for you to understand probability distributions.) Make age 110 the end of your planning horizon and the simulator calculates the probability that you'll run out of money before you die— whenever that may be.

	Simulate how your investments might perform under conditions of interest-rate and stock-market volatility.
	See how uncertain investment performance interacts with your planned future savings, target retirement age and planned retirement withdrawals.
	See at how early an age you can plan to retire and not worry too much about running out of money.
	Simulate how much money you might leave your heirs if your investments perform well.
	Simulate how, if your investments perform poorly, you might run of money before you die.
	Figure out whether you should invest aggressively or conservatively.
	Translate forecasts of interest-rate and stock-market volatility into probability distributions of investment performance.
	See the probabilities of leaving your heirs different amounts of money and the probabilities of running out of money at different ages.
	See the probability distribution (based on IRS data) that you will still be alive at every age from your current age up until age 110 (at which time your odds don't look so good).
	Calculate the probability that you will run out of money before you die.
	Find the combination of savings, target retirement age and retirement spending that gives you an acceptable risk of running out of money before you die.
	See how stock options perform within the context of retirement planning.
	Find the combination of stocks, bonds and options that give you the best chance of not running out of money before you die.
	Learn quickly and easily many of the core ideas of modern financial theory.
	Learn that "Every financial forecast is a probability distribution" and what that idea means.
	Develop a sophisticated understanding of probability distributions.
	Learn what "the market price of risk" is and how it influences your investment returns.
	Experiment with the Cox, Ingersoll, Ross interest-rate model.
	Compare Cox, Ingersoll, Ross simulations with historical interest rates.

When sophisticated financial analysts value investments, they know that they are valuing probability distributions. The Retirement Risk Simulator can give you a powerful introduction to this way of thinking.

The Retirement Risk Simulator is based on and introduces you to continuous time financial theory. Continuous time finance has rendered obsolete the models that underlie the marketing and educational materials that most financial firms use with their customers.